Property

Ireland has a very well established property industry and market, based on clear and well established real estate laws protecting ownership and priorities of interests in real estate.

There are many similarities between Irish and English real estate law. Real estate in Ireland is held either outright, in freehold, or for a specific period of time, under a lease.

Title to real estate may be registered in the Land Registry (known as registered title) or otherwise in the Registry of Deeds (known as unregistered title). Title in rural areas tends to be registered, much urban land is unregistered. Generally, the investigation of registered title is more straightforward in that it is based on one document of ownership. With unregistered title, it is necessary to trace the history of ownership for a period of at least twenty years, which can require greater legal due diligence.

Most real estate dealings are initially dealt with by a real estate agent who negotiates general heads of agreement. The more detailed negotiations and formalities of dealing with any contract or lease of real estate and subsequent transferring of ownership is then dealt with by lawyers.

Usually an acquisition of real estate will involve the entering into of a contract, due diligence and completion. However, as title insurance is not common in Ireland, it has become the practice recently in large scale commercial transactions for all due diligence to be carried out before contracts are signed.

Irish law recognises options in relation to real estate. Options are sometimes used to secure property where a potential purchaser is considering whether to proceed with a project or to secure land for potential expansion of the project in the future.

Commercial leases: Commercial leases are usually those where the tenant does not effectively own the property (see the section on Long Leases below regarding ownership).
Typically a short-term commercial lease will run for a period of less than five years while a long-term commercial lease will run for 20 to 25 years leases. Terms of 10 or 15 years are becoming more common for office space. Many leases contain break options which allow the tenants to terminate the lease at specific dates (e.g. after 10 years).
Most commercial leases are on a “full repairing and insuring” basis, so that a tenant carries responsibility either directly or indirectly for all repairs, insurance and outgoings (such as local authority charges). Rent reviews are typically every five years when the rent is reviewed to “open market” rental levels (on an upwards only basis). Matters such as any initial rent-free period or break options are concessions which must be negotiated.
There is a comprehensive code of landlord and tenant legislation which impacts on the terms of leases generally. In particular, with some limited exceptions, a commercial tenant who has been in continuous occupation for business purposes for a minimum of five years has a statutory right to renew that tenancy, or to obtain compensation from its landlord if the landlord does not wish to renew the tenancy. These rights apply to all kinds of commercial property, ranging from major developments like office blocks, shopping centres and industrial estates to small retail premises.
Generally, tenants cannot “waive” the right to a new tenancy, but there are exceptions available. This can have the advantage of allowing a landlord and tenant more flexibility in agreeing the length of term of a lease. It is anticipated that the law may change in the near future to allow all future tenants to waive renewal rights.
Landlord and tenant legislation also implies certain covenants in leases so that, for example, any outright restriction on disposal or change of user of a premises are subject to the implied provision that a landlord's consent cannot be unreasonably withheld.
Where a landlord's consent to an assignment of a leasehold interest is obtained and on foot of this a tenant transfers its interest, that tenant is normally then relieved of its future obligations under the lease. The incoming tenant becomes liable to the landlord for any future performance of those covenants. This represents a material difference to English law (to the benefit of tenants).
Long Leases: In the case of recently developed business properties which form part of a larger campus or development, the owners of these properties generally hold these properties under long leases (e.g. 999 years). The owners effectively own the properties and the leases contain some restrictions and management provisions which are designed to create a standardised management scheme for the campus and development.
Construction and Development: Ireland has well established laws and practice dealing with the design and construction of buildings. Developers or prospective owner-occupiers generally engage building contractors and design professionals under employment contracts setting out in detail the obligations of the contractor or design professional (including remedies for delay by the contractor and designer and professional indemnity insurance obligations during and after construction).
Building contractors and design professionals are often required (by the developer) to provide collateral warranties to future owners, occupants and financiers, whereby the building contractor or design professional provides contractual remedies to the owners, occupants or financiers in the event of defective construction or design (subject to certain limitations).
Real Estate as Security for Finance: Real Estate is frequently used to secure finance and Ireland has well established laws regarding this. Financiers will often accept a “Certificate of Title” from the borrower’s lawyers certifying that the borrower has good marketable title to the property being provided as security. This avoids delays and costs associated with a full due diligence by the financiers.
Legal Framework: In addition to the law relating specifically to real estate, developed principally by statute and case law, matters such as planning, environmental controls, taxation and employment rights are inextricably linked and must be considered.
Legal advice should be sought when dealing with real estate transactions as there is a significant body of legislation at Irish and EU level which can impact on the purchase, sale and leasing of real estate in Ireland.

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